Department of Economics and Business Economics

Dynamic Matching Markets and the Deferred Acceptance Mechanism

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  • John Kennes
  • Daniel Monte, Sao Paulo School of Economics, Denmark
  • Norovsambuu Tumennasan, Department of Economics, Dalhousie University, Canada, Denmark
In many dynamic matching markets, priorities depend on previous allocations. In such environments, agents on the proposing side can manipulate the period-by-period deferred acceptance (DA) mechanism. We show that the fraction of agents with incentives to manipulate the DA mechanism approaches zero as the market size increases. In addition, we provide a novel al- gorithm to calculate the percentage of markets that can be manipulated. Based on randomly generated data, we find that the DA becomes approximately non-manipulable when the schools capacity reaches 20. Our theoretical and simulation results together justify the implementation of the period-by-period DA mechanism in dynamic markets.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages45
Publication statusPublished - 15 Jan 2015
SeriesEconomics Working Papers
Number2015-23

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